Smiths Group Plc · LSE:SMIN
Smiths — Investor Day (2022)
16 slides from Smiths's investor day presentation, 2022
Slide 1: Deep Dive: Flex-Tek
Deep Dive Flex-Tek
Slide 2: Pat McCaffrey, President, Flex-Tek
Pat McCaffrey, President, Flex-Tek • Flex-Tek Operations Manager, 1996 - 1999 • Flex-Tek (Industrial Hose) General manager, 1999 -2002 • Flex-Tek (Heat Solutions) President, 2002 - 2008 • Flex-Tek COO, 2008 - 2019 • Flex-Tek President, 2019 - present | 2 |
Slide 3: Executive Summary
Executive Summary • Leading provider of solutions for safe and efficient fluid management • Strong positions in attractive markets: construction, aerospace, and general industrial (including medical hoses and industrial heating) • Competitive advantage from deep customer relationships, superior prod
Slide 4: Flex-Tek: solutions for the safe, efficient movement and heating of fluids
Flex-Tek: solutions for the safe, efficient movement and heating of fluids Revenue breakdown Revenue breakdown Key data by geographical region, % of by end markets, % of Flex-Tek total Flex-Tek total FY2022 revenue £647m (25% of Smiths) Europe APAC RoW General Aerospace Construction - Industrial res
Slide 5: Flex-Tek: a strong business with great positions in attractive markets
Flex-Tek: a strong business with great positions in attractive markets Market growth drivers Key customers Competitive strengths Competitive landscape • Continued strong demand for new • Construction and General • Leading capability in design, • Fragmented competition in most housing construction, d
Slide 6: The Flex-Tek growth story
The Flex-Tek growth story Revenue growth (£m) 13.9% Five-year track record 700 CAGR COVID-19 impact 600 500 • Double digit growth CAGR for revenue and 400 profit 300 200 Acquired Acquired FlashShield+ Acquired Python Sureheat United Flexible launch Royal Metals launch 100 • 6% organic revenue CAGR -
Slide 7: How Flex-Tek delivers growth
How Flex-Tek delivers growth Focus Examples • Industrial heating (Sureheat – 2017) Disciplined • Accelerating access to product • Aerospace (United Flexible – 2019) M&A adjacencies and geographical growth • HVAC portfolio (Royal Metal – 2021) • New platforms to support energy • Partnering with Midre
Slide 8: Construction
Construction Construction products include: Key customers Route to market Smiths relative position Flex Metal Corrugated Residential • 85% HVAC • Innovation leader in duct duct stainless steel tubing heat kits wholesale our segments distributors • Top three player in all • 15% HVAC OEMs segments • 9
Slide 9: New business initiatives within Construction
New business initiatives within Construction Python refrigerant line sets New duct plant in Houston • New product launch for • Synergy initiative from Royal £300m market segment: Metal acquisition replaces copper lines in HVAC • High demand from regional systems customers • All six sizes are fully •
Slide 10: Confident of further growth in Construction
Confident of further growth in Construction • The residential HVAC metal ducting Flex-Tek revenues demonstrate resilience and forward momentum segment in the US is worth approximately ~£0.8bn annually with the South accounting for c. 60% of the market • Flex-Tek sales concentrated in the South Flex-
Slide 11: General Industrial: heating and industrial hoses
General Industrial: heating and industrial hoses Industrial products include: Key customers Route to market Smiths relative position Medical Industrial Polymide Air • 35% wholesale • Top three in high end hose hose heater heater distributors medical hose • 65% OEM • A leader in high • 80% US sales t
Slide 12: New business initiative within Industrial
New business initiative within Industrial Current direct reduction of iron CO2 Midrex/ green steel project • Conversion of direct reduced iron (DRI) using H2 via electric heating systems rather than burning natural gas reduces carbon emissions in iron ore production by 95% • Annual carbon reduction
Slide 13: Aerospace
Aerospace Aerospace products include: Key customers Route to market Smiths relative position Rigid Flexible Hybrid • Supply globally • Top three in high- tubing tubing assemblies integrity flexible tubing • Commercial 55%, Military 45% • Middle position in • Direct to airframe high-integrity metal a
Slide 14: New business initiatives within Aerospace
New business initiatives within Aerospace LM900 natural gas “One Aero" operating model fuel lines • Consistent, single customer-facing team for global customer care • Enhanced, integrated business development team • Centre of excellence for tooling design and build • Production automation enhancemen
Slide 15: Role of M&A
Role of M&A • Expanded technology capability (e.g. SureHeat high voltage heating) Flex-Tek is pursuing a • Brought profitable growth and delivered synergies disciplined approach to M&A. • Delivered Royal Metals sales growth of 48% and profit growth of 70% since acquisition Recent acquisitions have:
Slide 16: Closing Remarks
Closing Remarks • We are confident about delivering further growth – resilient in most market conditions • Proven track record of consistent growth, margin expansion and successful M&A • Well-positioned with strong customer relationships in attractive markets and able to move into higher-growth adja